Skanska Corporate Governance Report 2020

Corporate governance report Part of Skanska Annual and Sustainability Report 2020

Corporate governance report

Good corporate governance ensures that Skanska is managed sustainably, responsibly and efficiently. The overall goal is to increase value for shareholders, and in doing so meet their expectations for invested capital. The purpose of corporate governance is also to ensure oversight by the Board of Directors (the “Board”) and management. By having a clearly defined governance structure as well as proper rules and processes, the Board can ensure that management and employees are focused on developing the business and thereby generating value for shareholders. This corporate governance report for 2020 has been reviewed by Skanska’s external auditors in accordance with Chapter 9, Section 31 of the Swedish Companies Act. The report contains information as required by Chapter 6, Section 6 of the Annual Accounts Act.

Corporate governance principles Key external governing documents Skanska is one of the world’s leading construction and project development companies, focused on selected home markets in the • Swedish Companies Act Nordic region, Europe and the USA. Supported by strong trends • Nasdaq Nordic Main Market Rulebook for Issuers of Shares in urbanization and demographics, and by aiming to be in the • Swedish Corporate Governance Code forefront of sustainability, Skanska offers competitive solutions for • Annual Accounts Act both simple and complex assignments. Driven by Skanska’s values • Securities Market Act and business model, Skanska helps create sustainable futures • International Financial Reporting Standards (IFRS) and for customers and communities as well as create value for share other accounting rules holders. The parent company of the Group is Skanska AB (the • Global Reporting Initiative (GRI) Standards “Company”), with a registered office in Stockholm, Sweden. As a Swedish public limited company with shares listed on Nasdaq Stockholm, Skanska is subject to a variety of external Key internal governing documents rules that affect its corporate governance. In addition, to ensure • Articles of Association compliance with legal and regulatory requirements and the high • Procedural Rules for the Board and its Committees standards that Skanska sets for itself, Skanska has adopted inter • Instructions for the CEO and President nal rules to govern the Group as well as processes for monitor • Group steering documents, including Group policies, ing compliance with the external and internal rules by all business standards and procedures, guidelines and business units and functions in the Group. Skanska’s ethical and sustain processes for approval, control and risk management ability endeavors are an integral part of the business, and the • Skanska’s Code of Conduct, which is available on the Board discusses these issues on a regular basis. Group’s website Skanska has no deviations from the Swedish Corporate Gover nance Code (the “Code”) to report for the financial year 2020. Nor has Skanska been subject to any rulings by Nasdaq Stockholm’s Disciplinary Committee or decisions on breach of good practices in the stock market by the Swedish Securities Council in 2020. Further information is available on the Group’s website: group.skanska.com/corporate-governance/.

Governance structure Shareholders, through the Nomination Committee External Auditors General Meeting of shareholders

Compensation Committee

Board of Directors Audit Committee

Project Review Committee

President and CEO, Internal Audit Group Functions Group Leadership Team and Compliance

Commercial Property Construction Residential Development Development

Skanska Annual and Sustainability Report 2020 33 Corporate governance report

Shares and shareholders (the Official Swedish Gazette) and on the Group’s website. An announcement of the notice convening the meeting is published Skanska’s Series B shares are listed on Nasdaq Stockholm in the in Dagens Nyheter and in at least one more Swedish daily news Large Cap segment. The share capital at the end of 2020 amounted paper. All documents relating to the AGM are published on the to SEK 1,259,709,216 consisting of a total of 419,903,072 shares, Group’s website in both Swedish and English. Shareholders listed of which 19,684,564 were Series A shares and 400,218,508 were in the register of shareholders on the record date and who notify Series B shares. Series A shares entitle the holders to ten votes per the Company of their intention to participate in the meeting are share and Series B shares entitle the holders to one vote per share. entitled to attend it either personally or by proxy through a repre Series A and Series B shares carry the same right to share in the sentative. Shareholders have the right to have matters addressed Company’s assets and entitle the holder to the same dividend. at the AGM if they have submitted a request to the Board no later There are no restrictions in the Articles of Association on the than seven weeks before the AGM. number of votes each shareholder may cast at a General Meeting. At the end of 2020, Skanska had a total of 103,936 shareholders, Annual General Meeting 2020 according to statistics from Euroclear Sweden AB. The ten largest The AGM 2020 was held on March 26, 2020, in Stockholm. A total shareholders held 55.9 percent of the votes and 39.4 percent of the of 770 shareholders, representing around 58.2 percent of the total capital. AB Industrivärden’s holding amounted to 24.3 percent of number of votes, were represented at the AGM. Among other the votes and Lundberg Group’s holding to 13.1 percent. matters, the meeting voted to re-elect Hans Biörck, Pär Boman, More information about the Skanska share and shareholders is Jan Gurander, Fredrik Lundberg, Catherine Marcus and Jayne available on page 10. McGivern as members of the Board and to elect Åsa Söderström Winberg as new member of the Board. Hans Biörck was re-elected General Meetings of shareholders as Chairman of the Board. The employees were represented on the The General Meeting is Skanska’s highest decision-making body Board by Ola Fält, Richard Hörstedt and Yvonne Stenman as mem and it is where shareholders exercise their decision-making rights. bers, with Pär-Olow Johansson1 and Anders Rättgård as deputy At the Annual General Meeting (“AGM”), the shareholders decide members. Due to precautionary measures relating to Covid-19, on key issues, such as adoption of income statements and balance the scope of the AGM was reduced to focus on legal requirements sheets; the dividend; the composition of the Board; discharging only. Since the Chairman of the Board could not participate at the the members of the Board and the President and CEO from lia AGM due to Covid-19, the Board appointed the board member bility; and election of external auditors. Skanska’s financial year is Pär Boman as the Board’s representative. The AGM was attended from January 1 to December 31, and the AGM is to be held within in person also by the President and CEO, a limited number of six months of the end of the financial year. The date and venue members of the Group Leadership Team, the Chairman of the for the AGM is communicated no later than the publishing of the Nomination Committee and Skanska’s external auditor. third quarter interim report on the Group’s website. The notice The AGM re-elected Ernst & Young AB as external auditor. On convening the meeting is published in Post- och Inrikes Tidningar March 24, 2020, the Board announced that, due to the prevailing

Annual General Meeting 2021 Skanska’s AGM 2021 will be carried out on March 30, 2021, through advance voting (so-called postal voting) pursuant to temporary legislation. No meeting with the possibility to attend physically, in person or by proxy, will take place.

1 Until July 1, 2020.

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uncertainty caused by Covid-19, it had decided to withdraw • Preparing a proposal to submit to the AGM regarding a Chair the dividend proposal to the AGM of SEK 6.25 per share. The man for the AGM Board also announced its ambition to convene an Extraordinary • When applicable, preparing a proposal on changes to the princi General Meeting in the autumn to decide on the dividend if the ples for appointing the next Nomination Committee. circumstances so permit. The AGM resolved, in accordance with the Board’s proposal, that no dividend be paid to the shareholders. Information on how shareholders can submit proposals to the The AGM also decided to adopt guidelines for salary and other Nomination Committee is available on the Group’s website. remuneration to senior executives. The Board was authorized to, during the period up to the AGM 2021, resolve on acquisitions Nomination Committee 2021 of not more than 1,200,000 Series B shares in Skanska on Nasdaq The Nomination Committee for the AGM 2021 has the following Stockholm to secure delivery of shares to participants in the composition: Skanska employee ownership program resolved by the AGM on • Helena Stjernholm, AB Industrivärden (24.3 percent of votes1), March 28, 2019 (Seop 5). Complete information on the AGM Chairman of the Nomination Committee 2020 and the minutes of the meeting are available on the Group’s • Mats Guldbrand, Lundberg Group (13.0 percent of votes1) website: group.skanska.com/corporate-governance/shareholders- • Dick Bergqvist, AMF (3.3 percent of votes1) meeting/. • Jan Andersson, Swedbank Robur Funds (2.3 percent of votes1) • Hans Biörck, Chairman of the Board, Skanska AB. Extraordinary General Meeting 2020 The Extraordinary General Meeting (“EGM”) was held on This information was announced on the Group’s website and October 22, 2020. Due to the risk of the spread of Covid-19 and published in a press release on September 28, 2020. According to the authorities’ regulations and advice, the EGM was carried out the Code, the majority of the Nomination Committee’s members in accordance with sections 20 and 22 of the Act (2020:198) on are to be independent in relation to the Company and its senior temporary exceptions to facilitate the execution of general meet executives and at least one member is also to be independent in ings in companies and other associations, allowing sharehold relation to the largest shareholders in the Company in terms of ers to exercise their voting rights at the EGM only by voting in voting rights. All of the appointed members are independent advance, so-called postal voting. in relation to the Company and its senior executives and three A total of 768 shareholders, representing around 55.6 percent of are independent in relation to the largest shareholders in the the total number of votes, were represented at the EGM. The EGM Company in terms of voting rights. resolved, in accordance with the Board’s proposal, to pay a divi In preparation for the AGM 2021, the Nomination Committee dend to the shareholders of SEK 3.25 per share and to set Octo held four meetings at which minutes were kept. No fees have been ber 26, 2020, as the record date for receiving dividend. Complete paid out for Nomination Committee duties. To perform its work, information on the EGM 2020 and the minutes of the meeting the Nomination Committee has taken part of the internal evalu are available on the Group’s website: group.skanska.com/corpo ation of the Board’s work, the Chairman’s account of board duties rate-governance/shareholders-meeting/. and the Company’s strategy. The Committee has also interviewed individual members of the Board. Furthermore, Skanska’s Presi dent and CEO and CFO have attended a meeting for presentation The Nomination Committee of the Company’s operations and strategies. The AGM 2018 gave the Chairman of the Board a mandate to For the composition of the Board, the Nomination Committee allow each of the four largest shareholders in terms of voting has applied the rules on the composition of the Board that are power to appoint a representative to join the Chairman on found in the Code. The Nomination Committee has applied rule the Nomination Committee for the next AGM. In determining 4.1 of the Code as diversity policy. The objectives of the diversity which are deemed to be the largest shareholders in terms policy is that the Board is to have a composition appropriate of voting power, the list of shareholders registered with and to the Company’s operations, phase of development and other categorized by Euroclear Sweden AB as of the last business day relevant circumstances, that the board members elected by in August is to be used. the General Meeting are collectively to exhibit diversity and The Nomination Committee’s mandate includes: breadth of qualifications, experience, background and need • Evaluating the composition of the Board and its work for renewal, and that a gender balance on the Board is to be • Preparing proposals to submit to the AGM regarding the strived for. The Nomination Committee considers that such a election of board members and the Chairman of the Board diversity and breadth is represented among the proposed board • Working with the Board’s Audit Committee to prepare propos members. Three out of seven of the proposed board members als to submit to the AGM regarding the election of auditors are women. The gender balance is therefore 43 percent women • Preparing a proposal to submit to the AGM on fees to the and 57 percent men, which, in the opinion of the Nomination non-employee members of the Board, to be divided between the Committee, is consistent with the gender balance requirement. Chairman and the other non-employee members, and any com The Nomination Committee further assess that those fields of pensation for committee work and fees to the auditors competence and experience considered important to Skanska are

1 Based on shareholding as of August 31, 2020.

Skanska Annual and Sustainability Report 2020 35 Corporate governance report

well represented in the proposed Board and that the composition and at least two members are to also be independent in relation to and size of the proposed Board is appropriate to meet Skanska’s the largest shareholders in the Company. All of the board members needs. The Nomination Committee has also assessed that the elected by the AGM 2020 are independent in relation to the proposed board members will be able to devote the necessary time Company and its senior executives. Of these, five members are also required to fulfil their tasks as board members in Skanska. The independent in relation to the Company’s largest shareholders. The Nomination Committee has assessed that the proposed Board composition of the Board and an assessment of the independence meets the requirements in the Code relating to board members’ of each member are presented in more detail on pages 42–43. independence. The Nomination Committee’s proposals, work report and infor The work of the Board in 2020 mation on proposed board members are published on the Group’s The work of the Board follows an annual agenda established in the website in connection with the notice convening the AGM. Board’s Procedural Rules. In preparation for each board meeting, the Board receives reports and documentation compiled accord Board of Directors ing to established procedures. The purpose of this is to ensure that the Board has the relevant information and documentation on According to the Articles of Association, the Board, with regard to which to base decisions. In 2020 the Board held nine meetings, members elected by shareholders at a General Meeting, shall con including its statutory meeting. The more important issues dealt sist of not fewer than five and not more than ten members, with with by the Board during the year included monitoring operations, not more than three deputies. The Board has overall responsibil review and approval of the interim reports and year-end report, ity for Skanska’s organizational structure and management, and strategic review of Skanska, withdrawal of dividend proposal to the Board’s main duty is to safeguard the interests of the Company the AGM 2020 in light of Covid-19, decision on dividend proposal and the shareholders. The Board thus makes decisions regarding and to convene an EGM, as well as internal control, risk manage the Group’s strategy, interim and annual reports, major construc ment and compliance matters. tion projects, investments and divestments, appointment of the President and CEO, and matters concerning the organizational Evaluation of the work of the Board structure of the Group. The Chairman leads the Board in its work The work of the Board is evaluated annually through a structured and has regular contact with the President and CEO in order to process aimed at improving work processes, efficiency and collec stay informed about the Group’s activities and development. tive expertise, and to assess any need for change. The Chairman of In 2020, the Board consisted of seven members elected by the the Board is responsible for the evaluation and for presenting the AGM, without deputies, plus three members and two deputy findings to the Board and the Nomination Committee. In 2020 members appointed by the trade unions. According to the Code, an evaluation was carried out in the form of individual conversa the majority of the Board’s AGM-elected members are to be tions between the Chairman and each member of the Board, but independent in relation to the Company and its senior executives, also through discussion during board meetings. TheChairman

The members and the deputy members of the Board Independent in Independent in Elected, Audit Compensation Project Review relation to the relation to major Member Position year Committee Committee Committee Company and GLT shareholders Hans Biörck Chairman 2016 • • • Yes Yes Pär Boman1 Member 2015 • • • Yes No Jan Gurander Member 2019 • • Yes Yes Fredrik Lundberg Member 2011 • Yes No Catherine Marcus Member 2017 • Yes Yes Jayne McGivern Member 2015 • • Yes Yes Charlotte Strömberg2 Member 2010 • • Yes Yes Åsa Söderström Winberg3 Member 2020 • • Yes Yes Ola Fält Employee Representative 2018 – – Richard Hörstedt4 Employee Representative 2007 • – – Yvonne Stenman Employee Representative 2018 – – Pär-Olow Johansson5 Employee Representative (Deputy) 2014 – – Hans Reinholdsson6 Employee Representative (Deputy) 2020 Anders Rättgård7 Employee Representative (Deputy) 2017 • – – • = Chairman • = Member 1 Chairman of the Audit Committee from April 27, 2020. 2 Until March 26, 2020. 3 From March 26, 2020. 4 Member of the Project Review Committee until March 26, 2020, and deputy member for Anders Rättgård from March 26, 2020. 5 Until July 1, 2020. 6 From December 16, 2020. 7 Member of the Project Review Committee from March 26, 2020.

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was also evaluated through a discussion with the Board without and ensure the quality of its work: (i) Audit Committee, (ii) Com the Chairman present; the board meeting on this occasion was pensation Committee and (iii) Project Review Committee. The chaired by another member appointed for the purpose. The out members of the committees are appointed annually at the statu come of the 2020 evaluation was that the work of the Board was tory meeting of the Board. The Board’s Procedural Rules specify deemed to be functioning well. which duties and decision-making powers have been delegated. The Chairman of each committee reports orally to the Board at Fees to the Board each board meeting and all minutes from the committee meetings The AGM 2020 resolved in accordance with the Nomination are submitted to the Board. Committee’s proposal on unchanged fees to the Chairman of the Board and to the other board members as well as unchanged Audit Committee fees for work in the committees of the Board compared to 2019. The main task of the Audit Committee is to assist the Board in over Total fees to the AGM-elected board members not employed by seeing the financial reporting, reporting procedures and account Skanska were thus approved by the AGM 2020 in the amount ing principles, and to monitor the auditing of the accounts for the of SEK 8,815,000. The Chairman of the Board received SEK Company and the Group. The committee also evaluates thequality 2,100,000 and the other board members not employed by Skanska of the Group’s reporting, internal auditing and risk management, received SEK 700,000 each. In addition, the Chairman of the and reviews the reports and opinions of Skanska’s external auditors. Audit Committee received SEK 230,000 and the other members The committee monitors the external auditors’ assessment of their of the committee SEK 165,000 each, the Chairman of the Com impartiality and independence, and that there are routines in place pensation Committee received SEK 110,000 and the other mem stipulating which non-audit services they provide to the Company bers of the committee SEK 105,000 each, and the Chairman of the and the Group. The committee also monitors compliance with the Project Review Committee and the other members of the commit rules on auditor rotation. The external auditors are present at com tee received SEK 210,000 each. For more detailed information, see mittee meetings. At least once a year the Audit Committee meets Note 37, Remuneration to senior executives and board members. the auditors without senior executives being present. In 2020 the Audit Committee consisted of Pär Boman (Chairman)1, Charlotte Strömberg (Chairman)2, Hans Biörck, The Board’s committees Jan Gurander and Åsa Söderström Winberg3. The Board is ultimately responsible for the organization of The Committee held five meetings in 2020. Important matters Skanska and the management of Skanska’s operations. The overall addressed during the year included capital allocation, financing, responsibility of the Board cannot be delegated, but the Board may pension reporting, external reporting, impairment testing, appoint committees to do preparatory work and explore certain write-downs in construction projects, larger disputes, review of issues in preparation for decisions by the Board. The Board has the interim reports and year-end report, internal control, risk formed three committees to provide structure, improve efficiency management and compliance matters.

Attendance at Board and Committee meetings Board meetings Audit Committee Compensation Committee Project Review Committee Number of meetings 9 5 5 12 Member Hans Biörck 7 5 5 10 Pär Boman1 9 5 5 12 Jan Gurander 9 5 12 Fredrik Lundberg 9 12 Catherine Marcus 9 12 Jayne McGivern 8 5 12 Charlotte Strömberg2 2 1 2 Åsa Söderström Winberg3 7 4 10 Ola Fält 9 Richard Hörstedt4 9 2 Yvonne Stenman 9 Pär-Olow Johansson5 4 Hans Reinholdsson6 Anders Rättgård7 9 10

1 Chairman of the Audit Committee from April 27, 2020. 2 Until March 26, 2020. 3 From March 26, 2020. 4 Member of the Project Review Committee until March 26, 2020, and deputy member for Anders Rättgård from March 26, 2020. 5 Until July 1, 2020. 6 From December 16, 2020. 7 Member of the Project Review Committee from March 26, 2020.

Skanska Annual and Sustainability Report 2020 37 Corporate governance report

Compensation Committee Operational management and The main task of the Compensation Committee is to prepare rec internal governance ommendations for decisions by the Board on the appointment or dismissal of the President and CEO, including salary and other Skanska operates with a decentralized governance model that remuneration, and the other Group Leadership Team members. recognizes the local characteristics of the construction and The committee prepares recommendations for decisions by the development markets, empowering the business units to develop Board on incentive programs and examines the outcomes of vari their business and deliver according to plan, while retaining the able remuneration components. profit and loss responsibility. The Group Headquarters (“Group In 2020 the Compensation Committee consisted of Hans Biörck HQ”) sets the Group strategy and targets, ensures effective (Chairman), Pär Boman and Jayne McGivern. The Code require financial capacity, and conducts proper follow-up on business unit ments regarding independence, according to which the Chairman performance and compliance. In the decentralized governance of the Board is permitted to be the Chairman of the Compensa structure operated, as a rule, the Group HQ establishes what tion Committee and other AGM-elected members are to be inde is required, while the business units are responsible for how pendent in relation to the Company and its senior executives, have requirements are met. Each business unit is headed by a President therefore been met. and has its own administrative functions and other resources The committee held five meetings in 2020. Important matters to conduct its operations effectively. Aside from day-to-day addressed during the year were review of Skanska’s variable remu operations managing projects, the business units deal with matters neration programs for the senior executives, review and eval such as their strategic development, business plans, investments, uation of the application of the guidelines for salary and other divestments and organization. remuneration to senior executives as well as the existing remuner The President and CEO and the Group Leadership Team ation structures and levels in the Company and review of senior executives’ other assignments. The committee further reviewed The President and CEO is appointed by the Board and runs the and prepared a remuneration report for resolution by the Board Company and the Group in accordance with the instructions and subsequent referral to the AGM 2021 for approval. adopted by the Board. The President and CEO is responsible for the day-to-day management of the operations of the Company Project Review Committee and the Group and is supported by the other members of the The Project Review Committee takes decisions on individual Group Leadership Team. The work of the President and CEO projects within the Construction, Residential Development is evaluated at one board meeting each year at which no senior and Commercial Property Development business streams and executives are present. The President and CEO has no business on certain project financing packages. Projects above a certain dealings of any significance with the Company or its Group monetary threshold or that involve especially high or unusual companies. Information on the President and CEO and the risks or other special circumstances may be referred to the Board other members of the Group Leadership Team can be found for a decision. The committee consists of all AGM-elected board on pages 44–45.

members and employee representative Anders Rättgård, with Core corporate functions and Group functions employee representative Richard Hörstedt as deputy member for Anders Rättgård. The committee held twelve meetings in 2020. Core corporate functions and Group functions are based at the Group HQ in Stockholm. The Core corporate functions and Group functions assist the President and CEO and the Group External auditors Leadership Team on matters relating to corporate functions, coor According to the Articles of Association, the Company shall dination and oversight. They also provide support to the business have one or two authorized auditors and no more than two dep units. The head of each Group function reports directly to a mem uty auditors. A registered accounting firm may be appointed as ber of the Group Leadership Team. The head of the Internal Audit the Company’s external auditor. At the AGM 2020, Ernst & Young and Compliance reports directly to the Board by way of the Audit AB was re-elected as external auditor, until the close of the AGM Committee. A presentation of the Core corporate functions and 2021. Authorized Public Accountant Hamish Mabon is the audi Group functions can be found on page 39. tor in charge. The external auditor has attended two board meet ings to report on the auditing process of Ernst & Young AB for Remuneration to senior executives Skanska and to provide the members of the Board with an oppor The AGM 2020 approved the Board’s proposal for guidelines tunity to ask questions without senior executives being present. for salary and other remuneration to senior executives. The The external auditor has also attended five meetings of the Board’s guidelines and information about salary and other remuneration Audit Committee. For information on fees and other remunera to senior executives, as well as outstanding share award and share- tion to the external auditor for audit-related and other services, related incentive programs, are found in Note 37, Remuneration see Note 38, Fees and other remuneration to auditors. to senior executives and board members. Senior executives include the President and CEO and the other members of the Group Leadership Team.

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Purpose and values It covers such topics as health and safety; diversity and inclusion; While creating shareholder value, Skanska’s purpose is to build for data protection; environment; confidentiality; conflicts of inter a better society. This reflects the Group’s role in society, a position est; fraud; fair competition; anti-corruption and anti-bribery; and that enables Skanska to create shareholder value. Fundamental to insider information and market abuse. All Skanska employees are Skanska’s success are four values; Care for Life; Act Ethically and required to uphold the principles and requirements contained Transparently; Be Better – Together; and Commit to Customers. in the Code of Conduct. All employees receive Code of Conduct They serve as a moral foundation and compass, and Skanska con training every two years, and new employees are trained within stantly drives the need for every employee to strongly live these one month of starting with Skanska. This requirement applies values in all they do. equally to members of the Board. Skanska provides innovative and sustainable solutions to create The Code of Conduct is supplemented by the Supplier Code a sustainable future for its employees, customers, shareholders and of Conduct which must be adhered to by all subcontractors, sup communities. This is reinforced by continued commitment to the pliers, consultants, intermediaries and agents. The Supplier Code sustainability focus areas Health and Safety, Ethics, Green, Com of Conduct is included in agreements with these parties and out munity Investment as well as Diversity and Inclusion. Sustain lines the expectations that Skanska put on those Skanska does ability at Skanska is grounded in the Group’s purpose and values. business with. The Supplier Code of Conduct covers topics such Skanska’s sustainability report can be found on pages 58–86. as fair working conditions; discrimination and harassment; anti-corruption and anti-bribery; and fair competition. Code of Conduct Skanska’s Code of Conduct Hotline provides a mechanism for Skanska’s Code of Conduct is based on the Skanska values and sets employees, suppliers’ employees and other third parties to anony the standard for the daily behavior of employees and how Skanska mously report on breaches or suspected breaches of the Skanska’s does business. It is reviewed regularly by the Group Leadership Code of Conduct. The hotline is managed by an independent Team and updates are approved by the Board. It defines Skanska’s third-party service provider and is a supplement to the internal commitments at the workplace, in the marketplace and to society. reporting channels that all employees have access to.

Skanska’s management structure Group Leadership Team

Anders Danielsson, President and CEO

Magnus Persson Caroline Richard Kennedy Claes Larsson Kirsi Mettälä, EVP, CFO Fellenius-Omnell EVP EVP EVP, EVP, General Counsel Human Resources

Finance Legal Human Resources Communications

Reporting and Assurance and Skanska Skanska Commercial Sustainability Core Corporate Accounting Control USA Building Property Function Development Nordic

Financial Support Skanska Skanska Commercial Skanska Business Unit/ and Analysis USA Civil Property Finland Operating Unit Development Europe

Skanska Skanska Commercial Skanska Group Financial Services Property Norway Function Development USA

Investor Skanska Residential Skanska Reports directly Relations Development Sweden to the Board Europe

Information BoKlok Skanska Technology Housing Central Europe

Internal Audit Skanska and Compliance UK

Asset Management1

1 Portfolio of PPP assets.

Skanska Annual and Sustainability Report 2020 39 Corporate governance report

Skanska’s reporting structure Business Streams

Operating units Construction Residential Development Commercial Property Development

Operating unit External reporting Operating unit External reporting Operating unit External reporting Sweden • • • Norway • • • Finland • • • Commercial Property Development Nordic • Central Europe • United Kingdom • Commercial Property Development Europe • Residential Development Europe • USA Civil • USA Building • Commercial Property Development USA • BoKlok1 •

• = Operating unit = External reporting 1 BoKlok has operations in Sweden, Norway, Finland and the UK. in the external reporting BoKlok is divided and included in the Nordic cluster, of which Sweden, and Europe.

Governance framework add local, practical detail to the steering documents in the Group The Group HQ is responsible for setting the Group governance governance framework. The Business Unit President is responsi framework, and for following up on its implementation and effec ble for implementation of the Group governance framework in the tive operation in the business units. The Group governance frame respective business unit. work consists of three categories of steering documents: Group The Procedural Rules for the Board and its Committees state policies and Group procedures and standards, which are manda which items of business will be decided upon by the Board, by the tory, as well as non-mandatory guidelines for the Group. President and CEO, by the Group Leadership Team, or at the busi A clear framework of policies, procedures and standards ness unit level. reduces risks and increases effectiveness, it also makes it easier to In addition to the Board’s Procedural Rules, and Skanska’s Code live by Skanska’s Code of Conduct and the Skanska values. The of Conduct and Supplier Code of Conduct, Skanska’s Group poli Group governance framework steering documents define how cies include: Skanska’s operations are run, controlled and organized, which • Anti-Corruption Policy standards and processes to work according to, how to manage • Claims Management Policy risks, at what levels decisions are made and what is mandatory for • Enterprise Risk Management Policy the Skanska business units. The governance framework is appli • Finance Policy cable to the Company, all Skanska business units and Skanska • Human Resources Policy employees. If not followed, there may be consequences, up to and • Information Policy including dismissal. • Insider Policy The business units are required to establish and maintain a • IT Policy robust and well-functioning system of governance within their • Personal Data Protection Policy operations. Business units’ governance systems, such as business • Sustainability Policy. units’ policies and management systems, should complement and

Group policies Group standards or Group procedures Group guidelines Core mandatory operating rules of the Group, Mandatory. Procedures are generally detailed A non-binding document containing guidance addressing risks, goals and where corporate step-by-step instructions to achieve a given goal, for the organization. governance is required. while standards indicate expected behavior or a minimum level of quality or a minimum standard.

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Internal control Risks and opportunities for improvement are both greatest during the actual execution phase of the projects, and thus the work This description includes the most important elements ofSkanska’s focuses heavily on this phase. Since almost every project is unique, internal control and risk management systems in connection with risks and opportunities must be analyzed with respect to project financial reporting. type, location, execution phase and client. During execution, Control environment projects over a set threshold must adhere to the Skanska Project Review and Reporting Procedure to ensure consistent project The Board has overall responsibility for ensuring that Skanska has reviews, including a process to make sure that deviations from effective and adequate risk management and internal control. The planned performance are detected and acted upon early. All busi purpose is to provide a reasonable assurance that the operations ness units employ common valuation principles and terminology are run appropriately and efficiently, that external reporting to ensure conservative project valuation and a high level of perfor is reliable, and that laws and regulations and internal rules are mance transparency. complied with. The Board’s Procedural Rules ensure a clear division of roles and responsibilities for the purpose of ensuring Information and communication effective management of business risks. The Board and the Group Significant accounting principles, manuals and other documents Leadership Team have also adopted a number of fundamental of importance in financial reporting are updated and information rules of importance for internal control work, such as the Group’s on them is communicated regularly. There are several information Enterprise Risk Management Policy and the Group Governance channels to the Group Leadership Team and the Board for import Procedure. The Group Leadership Team reports regularly to the ant information. For its external communication, the Group has an Board according to established routines. The Audit Committee Information Policy to ensure that Skanska complies with existing also presents reports on its work. The Group Leadership Team is regulations on providing the market with accurate information. responsible for the system of internal controls required to manage material operational risk. This includes a clear decision-making Monitoring structure and the Group framework of policies, standards/ The Board continually evaluates the information provided by the procedures and guidelines. Group Leadership Team and the Audit Committee. Of particular The Group Function Assurance and Control supports the Group importance is the result of the Audit Committee’s work on mon Leadership Team in monitoring the system of internal control. itoring the effectiveness of the Group Leadership Team’s internal Risk assessment and control activities control processes. This includes ensuring that steps are taken to address the shortcomings revealed in internal and external audits Skanska has identified the material risks in its operations that and to implement the proposed actions. may, if not managed correctly, lead to errors in financial reporting and/or have an impact on the Company’s performance results. Internal Audit and Compliance The Group HQ has subsequently ensured that the Group has rules The Group function Internal Audit and Compliance is responsi in place to guarantee that these risks are managed. The Group ble for monitoring and evaluating risk management and internal Leadership Team and the Group functions are responsible for control processes. The work is planned in consultation with the managing general risks relating to strategy, macroeconomics Audit Committee and reporting takes place directly to the Board and regulatory frameworks, while the main tasks relating to through the committee. Matters relating to internal audit are also operational risk and opportunities are carried out at the local communicated on an ongoing basis to Skanska’s external auditors. level within the business units. A detailed description of the In 2020, Internal Audit and Compliance focused on reviewing the identified enterprise risks and how they are managed is found risks identified relating to the Group’s projects, business-critical on pages 51–56. processes and key corporate functions. A total of 100 audits were Skanska uses a Group-wide procedure for identifying and man conducted during the year within all business units. There was a aging risks associated with construction contracts and project particular focus on the business operations in USA and the UK. development. A specialized Group unit, the Skanska Risk Team, The audits were performed in accordance with a uniform audit examines and analyzes proposals for tenders in construction and method. land investments, project starts as well as divestments in proj ect development above a certain size. Based on the identified risks and opportunities, the Skanska Risk Team then issues a recom mendation on how to proceed. The final decision is made by the Skanska Tender Board, which consists of the Group Leadership Team, and, in certain cases, the Project Review Committee.

Skanska Annual and Sustainability Report 2020 41 Board of Directors

Board of Directors

Hans Biörck Pär Boman Jan Gurander Fredrik Lundberg Catherine Marcus Jayne McGivern Åsa Söderström Winberg Position Chairman Board member Board member Board member Position Board member Board member Board member Born Sweden, 1951 Sweden, 1961 Sweden, 1961 Sweden, 1951 Born USA, 1965 United Kingdom, 1960 Sweden, 1957 Elected 2016 2015 2019 2011 Elected 2017 2015 2020 Shareholding 25,000 B shares through privately 1,000 B shares 0 shares 6,032,000 A shares and Shareholding 0 shares 0 shares 2,500 B shares through privately in Skanska, owned company 15,550,000 B shares through in Skanska, owned company and 800 B shares December 31, 2020 L E Lundbergföretagen AB (publ) December 31, 2020 through related person 1,150,000 B shares through privately owned company 5,376 A shares and 1,100,000 B shares privately Other board – Chairman, Trelleborg AB – Chairman, Handelsbanken AB – Board member, The Association – Chairman, AB Industrivärden Other board – Board member, NCREIF PREA – Board member, Cairn Homes plc − Chairman, Scanmast AB assignments – Board member, – Chairman, Essity AB of Swedish Engineering Industries – Chairman, Holmen AB assignments Reporting Standards Board − Board member, Vattenfall AB Handelsbanken AB – Chairman, Svenska – Chairman, Hufvudstaden AB (Private) – Board member, Cellulosa Aktiebolaget SCA – Vice Chairman, OEM International AB – Vice Chairman, AB Industrivärden Handelsbanken AB − Board member, Delete Group Oyj – Board member, − Board member, Fibo AS L E Lundbergföretagen AB Education – Master of Science in Business and – Degree in engineering and in – Master of Science in Business – M.Sc. Engineering, Royal Institute Education – M.S., Real Estate Investment – Harrogate Ladies College – B. Sc. Economics, Stockholm Economics, Stockholm School of economics and Economics, Stockholm of Technology, Stockholm and Development, New York – Fellow of the Royal Institution University Economics School of Economics – Master of Business Administra- University of Chartered Surveyors tion (M.B.A), Stockholm School – B.S.E. Real Estate Finance and of Economics Entrepreneurial Management, – Dr. (Econ.) h.c., Stockholm School Wharton School, University of of Economics Pennsylvania – Dr. (Eng.) h.c., Linköping University Work experience – Chief Financial Officer, Skanska AB – President and CEO, – Deputy CEO AB Volvo (since – President and CEO, Work experience – Global Chief Operating – President Development and − CEO, Sweco Theorells AB – Chief Financial Officer, Autoliv AB Handelsbanken AB 2018) L E Lundbergföretagen AB Officer, PGIM Real Estate Construction, Madison Square − CEO, Ballast Väst AB – Chief Financial Officer, Esselte AB – Deputy CEO and CFO AB Volvo – PGIM Real Estate Garden Company Ltd – Marketing Manager, NCC – CFO & Senior Vice President – MBL Life Assurance Corporation – Red Grouse Properties Industry Finance Volvo Car Group – Chief Executive Officer, – Communications Manager, – CFO MAN Diesel & Turbo SE Multiplex plc (Europe) NCC Bygg AB – Group Vice President and – Managing Director UK, CFO, Scania AB Anschutz Entertainment Group Dependency relation- – Independent in relation to the – Independent in relation to the – Independent in relation to the – Independent in relation to Dependency – Independent in relation to the – Independent in relation to – Independent in relation to ship in accordance with company and its executive company and its executive company and its executive the company and its executive relationship in company and its executive the company and its executive the company and its executive the Swedish Corporate management management management management accordance with the management management management Governance Code – Independent in relation to major – Dependent in relation to major – Independent in relation to major – Dependent in relation to major Swedish Corporate – Independent in relation to major – Independent in relation to major – Independent in relation to major shareholders shareholders shareholders shareholders Governance Code shareholders shareholders shareholders

Board members and deputies appointed by the trade unions1

Ola Fält Richard Hörstedt Hans Reinholdsson Born: Sweden, 1966 Born: Sweden, 1963 Born: Sweden, 1972 Skanska Industrial Region Hus Syd; Region Hus Göteborg; Solutions; appointed by appointed by Byggnads appointed by Byggnads SEKO in 2018 in 2007 in 2020 Board member Board member Deputy board member Shareholding in Skanska Shareholding in Skanska 1,772 B shares 0 shares Shareholding in Skanska 610 B shares

1 Shareholding in Skanska as of December 31, 2020.

42 Skanska Annual and Sustainability Report 2020 Board of Directors

Anders Rättgård Yvonne Stenman Auditors Born: Sweden, 1961 Born: Sweden, 1959 Ernst & Young AB Region Hus Göteborg; Region Hus Stockholm Nord; Auditor in charge since 2016: appointed by Unionen in appointed by Hamish Mabon, Stockholm, 2017 Ledarna in 2018 born 1965, Authorized public Deputy Board member Deputy Board member accountant. Shareholding in Skanska Shareholding in Skanska 3,787 B shares 0 shares

Skanska Annual and Sustainability Report 2020 43 Group Leadership Team

Group Leadership Team

Anders Danielsson Caroline Fellenius-Omnell Richard Kennedy Claes Larsson Kirsi Mettälä Magnus Persson Position President and Chief Executive Officer Executive Vice President, Executive Vice President Position Executive Vice President Executive Vice President, Executive Vice President, (since 2018) General Counsel (since 2017) (since 2018) (since 2006) Human Resources (since 2018) Chief Financial Officer (since 2018)

Responsible for business units/Core Responsible for Core Corporate Function/ Responsible for business units Responsible for business units Responsible for Core Corporate Responsible for Core Corporate Function/ Corporate Function Group Function – Skanska USA Building – Skanska Commercial Property Function/ Group Function Group Functions/Operating unit – Skanska Finland – Legal – Skanska USA Civil Development Nordic – Human Resources – Finance – Skanska Norway – Assurance and Control – Skanska Commercial Property – Sustainability – Reporting and Accounting – Skanska Sweden Development Europe – Financial Support and Analysis – Skanska Central Europe – Skanska Commercial Property – Skanska Financial Services – Skanska UK Development USA – Investor Relations – Communications – Skanska Residential Development – IT Europe – Internal Audit and Compliance – BoKlok Housing – Asset Management

Born 1966 1968 1966 Born 1965 1963 1976

Joined Skanska in 1991 2017 2004 Joined Skanska in 1990 1994 2006

Shareholding in Skanska 136,186 B shares 10,955 B shares 26,007 B shares Shareholding in Skanska 200,998 B shares 27,671 B shares 20,984 B shares December 31, 2020 December 31, 2020

Awarded but unvested share awards 76,018 B shares 27,510 B shares 68,205 B shares Awarded but unvested share awards 40,445 B shares 20,129 B shares 27,644 B shares under Skanska’s long-term share saving under Skanska’s long-term share saving program (Seop), December 31, 20201 program (Seop), December 31, 20201

Board assignments – – Board member, The Swedish – Building Trades Employers Board assignments – Chairman, Handelsbanken’s regional – Chairperson, Nomination Committee, Association of Listed Companies Association, NY, USA bank board of directors, western FIBS (Finnish Business Society) Sweden – Board member, Stockholm School of Economics, Advisory Board

Education – M.Sc. Engineering, Royal Institute – Master of Laws, – Bachelor of Arts, Rutgers College, Education – M.Sc. Engineering, Chalmers University – Bachelor of Business Administration, – Ph.D. in Business Economics, of Technology, Stockholm Stockholm University Rutgers University of Technology Haaga-Helia University Uppsala University – Advanced Management Program, – Master of Laws, College of Europe, – Juris Doctor, Seton Hall University School – MBA, Chalmers University of Technology of Applied Sciences – Master of Science in Business Harvard, Boston MA Bruges of Law and University of Gothenburg – eMBA, Aalto Executive Education Economics, Uppsala University – Master of Laws, London School of Economics and Political Science

Work experience – Executive Vice President, Skanska AB – Group General Counsel, Tele2 AB – President and CEO, Work experience – President, – Senior Vice President, HR and – Chief Financial Officer, – President, Skanska Sweden – Group General Counsel, Sidel Skanska USA Building Skanska Commercial Property Communications, Skanska Finland Skanska Sverige AB – President, Skanska Norway – General Counsel Europe,Tetra Pak AB – Chief Operating Officer, Development Nordic – Senior Vice President, HR Development, – Senior Vice President, Investor – Corporate Counsel, AB Electrolux Skanska USA Building – President, BU Skanska Finland Relations, Skanska AB – General Counsel, Skanska Fastigheter – HRD manager, Skanska Finland – Group Manager, Corporate Finance, Skanska USA Building Göteborg – HR specialist, Skanska Finland Skanska AB – Head of Research & Analysis, Skanska Financial Services AB

Presidents of Gunnar Hagman Paul Hewins Jan Odelstam Business units Skanska Sweden Skanska USA Building Skanska Commercial Property Ståle Rød Don Fusco Development Nordic Skanska Norway Skanska USA Civil Katarzyna Zawodna Tuomas Särkilahti Jonas Spangenberg Skanska Commercial Property Skanska Finland BoKlok Housing Development Europe Michal Jurka Björn Matsson Robert Ward Skanska Central Europe Skanska Residential Skanska Commercial Property Development USA Greg Craig Development Europe Skanska UK

1 Share awards awarded during 2018–2020. In order for the shares to vest, an additional three years of service from each award date are required. Share awards for 2020 are further preliminary. The Board will determine the outcome for 2020 in the first quarter of 2021 after reviewing operational performance.

44 Skanska Annual and Sustainability Report 2020 Group Leadership Team

Born 1966 1968 1966 Born 1965 1963 1976

Joined Skanska in 1991 2017 2004 Joined Skanska in 1990 1994 2006

Shareholding in Skanska 136,186 B shares 10,955 B shares 26,007 B shares Shareholding in Skanska 200,998 B shares 27,671 B shares 20,984 B shares December 31, 2020 December 31, 2020

Senior Vice Presidents, Katarina Bylund André Löfgren Core Corporate Functions/ Reporting and Accounting Investor Relations Group Functions Karolina Cederhage Therese Tegner Communications Skanska Financial Services Anders Göransson Anders Candell Internal Audit and Compliance Information Technology (IT) Lena Hök Caroline Walméus2 Sustainability Financial Support and Analysis Mark Lemon Sanna-Mari Pöyhtäri3 Assurance and Control Financial Support and Analysis

1 Share awards awarded during 2018–2020. In order for the shares to vest, an additional three years of service from each award date are required. Share 2 Until February 6, 2021. awards for 2020 are further preliminary. The Board will determine the outcome for 2020 in the first quarter of 2021 after reviewing operational performance. 3 From February 8, 2021.

Skanska Annual and Sustainability Report 2020 45 Auditor’s report

Auditor’s report

This is a translation from the Swedish original. Basis for Opinions We conducted our audit in accordance with International Stan- To the general meeting of the shareholders of Skanska AB dards on Auditing (ISA) and generally accepted auditing stan- (publ), corporate identity number 556000-4615 dards in Sweden. Our responsibilities under those standards are further described in the Auditor’s Responsibilities section. We Report on the annual accounts are independent of the parent company and the group in accor- and consolidated accounts dance with professional ethics for accountants in Sweden and have otherwise fulfilled our ethical responsibilities in accordance Opinions with these requirements. This includes that, based on the best of We have audited the annual accounts and consolidated accounts our knowledge and belief, no prohibited services referred to in of Skanska AB (publ) for the year 2020 except for the statutory the Audit Regulation (537/2014) Article 5.1 have been provided to sustainability report on pages 58–86. The annual accounts and the audited company or, where applicable, its parent company or consolidated accounts of the company are included on pages its controlled companies within the EU. 33–45 and 51–193 in this document. We believe that the audit evidence we have obtained is suffi- In our opinion, the annual accounts have been prepared in cient and appropriate to provide a basis for our opinions. accordance with the Annual Accounts Act and present fairly, in all material respects, the financial position of the parent compa- Key audit matters ny as of December 31st, 2020 and its financial performance and Key audit matters of the audit are those matters that, in our pro- cash flow for the year then ended in accordance with the Annual fessional judgment, were of most significance in our audit of the Accounts Act. The consolidated accounts have been prepared annual accounts and consolidated accounts of the current period. in accordance with the Annual Accounts Act and present fairly, These matters were addressed in the context of our audit of, and in all material respects, the financial position of the group as of in forming our opinion thereon, the annual accounts and con- December 31st, 2020 and their financial performance and cash solidated accounts as a whole, but we do not provide a separate flow for the year then ended in accordance with International opinion on these matters. For each matter below, our description Financial Reporting Standards (IFRS), as adopted by the EU, and of how our audit addressed the matter is provided in that context. the Annual Accounts Act. A corporate governance statement has We have fulfilled the responsibilities described in the Auditor’s been prepared. Our opinions do not cover the statutory sustain- responsibilities for the audit of the financial statements section ability report on pages 58–86. of our report, including in relation to these matters. Accordingly, The statutory administration report and the corporate gover- our audit included the performance of procedures designed to nance statement are consistent with the other parts of the annual respond to our assessment of the risks of material misstatement accounts and consolidated accounts, and the corporate gover- of the financial statements. The results of our audit procedures, nance statement is in accordance with the Annual Accounts Act. including the procedures performed to address the matters We therefore recommend that the general meeting of share- below, provide the basis for our audit opinion on the accompany- holders adopts the income statement and balance sheet for the ing financial statements. parent company and the group.

194 Skanska Annual and Sustainability Report 2020 Auditor’s report

Revenue recognition over time in Construction contracts

Description How our audit addressed this key audit matter The main portion of the company’s income relates to con- Our audit procedures include, among others, analytical pro- struction contracts. For 2020 the revenues from construction cedures of revenue and margins of material projects and data contracts amount to MSEK 130,325. Usually a performance obli- analytics of transactions. We have audited samples of revenue gation is satisfied over time, which means that revenue should and costs in selected projects, which are of material size or rep- be recognized over time by measuring the progress towards resents a significant risk to the company. We have also had dis- complete satisfaction of that performance obligation. Revenue cussions with the company’s controllers and responsible project is recognized on the basis of the company’s efforts to the satis- managers about assessments, assumptions and estimates relat- faction of a performance obligation relative to the total expected ed to revenue recognition, profit margin and cost allocation. efforts. This requires the entity to be able to measure its progress We have also audited material contracts to identify potential towards complete satisfaction of the performance obligation and risks for penalties due to any delays in the projects, and we also determine the transaction price. This in turn requires that the have continuous meetings with the Company’s internal legal Group has effective, coordinated systems for cost estimation, representatives. We have audited provisions and other reserves forecasting and revenue/expense reporting. Also, a consistent related to projects within Construction based on underlying process is required to assess the final outcome of the project, support and the Company’s assessments. including analysis of differences compared with earlier assess- We have continuous meetings and discussions with responsi- ment dates. This critical judgment is performed at least once per ble auditors in each country to identify and cover country- quarter. specific risks. We have assessed the historical accuracy of the company’s estimates of the final outcomes of projects through discussions with Group Leadership Team and Audit Committee regarding the actual outcome. In addition, we have evaluated whether the valuation of revenue in the Company’s accounting principles is reasonable and assessed the completeness of the disclosure requirements, which are found in Note 4 “Operating Segments” and Note 9 “Contract assets and contract liabilities”.

Valuation of investments in property project development

Description How our audit addressed this key audit matter The book value of investments in property development Our audit procedures include assessing budgets and finan- projects, which constitute current asset properties, amounts to cial projections and reviewing other financial input used to MSEK 44,947 as shown in note 22 “Current-asset properties/ determine the value in use models. We have also audited work Project development”. As shown in note 22 the current-asset performed by external appraisers. We specifically focused on properties are carried at cost or net realizable value, whichever the sensitivity in the difference between the net realizable value/ is lower. The company therefore makes calculations of the estimated value and book values of the projects, where a reason- net realizable value. Potential impairment in development ably possible change in assumptions could cause the carrying projects under construction and completed projects could have amount to exceed its estimated present value. We also assessed significant impact on the company’s net income. Changes in the historical accuracy of the company’s estimates of the final the supply of similar projects, as well as changes in demand may outcomes of valuation through discussions with Group Lead- materially affect both estimated market values and carrying ership Team and the Audit Committee regarding the actual amounts for each project. These projects vary in size and the outcome. investment cycle could be either short or long. Finally, we evaluated the adequacy of the Company’s disclosures included in Note 22.

Skanska Annual and Sustainability Report 2020 195 Auditor’s report

Claims and litigations

Description How our audit addressed this key audit matter The provision for legal disputes amounts to MSEK 1,786. As We have gained an understanding of the claims and litigations outlined in Note 29 “Provisions” of the Annual Report, the through discussions with the responsible persons within the Company is exposed to potential claims and disputes in the Company, the Group Leadership Team and the Audit Com- Construction business stream for projects that have been committee. We have read the internal position papers prepared by pleted. Claims and disputes including any provisions is a key the Company. We also obtained lawyers’ letters to the extent audit matter to our audit because management judgement is considered necessary for our audit. For all potentially material required. The assessment process is complex and entails assess- claims we tested the underlying facts and circumstances con- ing future developments. In addition, some of the claims are in sidered relevant for the legal advisors to reach their conclusions countries where the legal proceedings can stretch out over an and assessed the best estimate of outflows and associated provi- extended period of time. sions as determined by the Company.

Other Information than the annual accounts accounting. The going concern basis of accounting is however and consolidated accounts not applied if the Board of Directors and the Managing Director This document also contains other information than the annual intends to liquidate the company, to cease operations, or has no accounts and consolidated accounts and is found on pages 1–32, realistic alternative but to do so. 46–50 and 194–211. The Board of Directors and the Managing The Audit Committee shall, without prejudice to the Board Director are responsible for this other information. of Director’s responsibilities and tasks in general, among other Our opinion on the annual accounts and consolidated accounts things oversee the company’s financial reporting process. does not cover this other information and we do not express any form of assurance conclusion regarding this other information. Auditor’s responsibility In connection with our audit of the annual accounts and con- Our objectives are to obtain reasonable assurance about whether solidated accounts, our responsibility is to read the information the annual accounts and consolidated accounts as a whole are identified above and consider whether the information is mate- free from material misstatement, whether due to fraud or error, rially inconsistent with the annual accounts and consolidated and to issue an auditor’s report that includes our opinions. Rea- accounts. In this procedure we also take into account our knowl- sonable assurance is a high level of assurance, but is not a guar- edge otherwise obtained in the audit and assess whether the antee that an audit conducted in accordance with ISAs and gen- information otherwise appears to be materially misstated. erally accepted auditing standards in Sweden will always detect If we, based on the work performed concerning this informa- a material misstatement when it exists. Misstatements can arise tion, conclude that there is a material misstatement of this other from fraud or error and are considered material if, individually or information, we are required to report that fact. We have nothing in the aggregate, they could reasonably be expected to influence to report in this regard. the economic decisions of users taken on the basis of these annual accounts and consolidated accounts. Responsibilities of the Board of Directors As part of an audit in accordance with ISAs, we exercise profes- and the Managing Director sional judgment and maintain professional scepticism through- The Board of Directors and the Managing Director are responsi- out the audit. We also: ble for the preparation of the annual accounts and consolidated • Identify and assess the risks of material misstatement of the accounts and that they give a fair presentation in accordance annual accounts and consolidated accounts, whether due to with the Annual Accounts Act and, concerning the consolidated fraud or error, design and perform audit procedures responsive accounts, in accordance with IFRS as adopted by the EU. The to those risks, and obtain audit evidence that is sufficient and Board of Directors and the Managing Director are also respon- appropriate to provide a basis for our opinions. The risk of sible for such internal control as they determine is necessary not detecting a material misstatement resulting from fraud is to enable the preparation of annual accounts and consolidated higher than for one resulting from error, as fraud may involve accounts that are free from material misstatement, whether due collusion, forgery, intentional omissions, misrepresentations, to fraud or error. or the override of internal control. In preparing the annual accounts and consolidated accounts, • Obtain an understanding of the company’s internal control The Board of Directors and the Managing Director are responsi- relevant to our audit in order to design audit procedures that ble for the assessment of the company’s and the group’s ability to are appropriate in the circumstances, but not for the purpose continue as a going concern. They disclose, as applicable, matters of expressing an opinion on the effectiveness of the company’s related to going concern and using the going concern basis of internal control.

196 Skanska Annual and Sustainability Report 2020 Auditor’s report

• Evaluate the appropriateness of accounting policies used and Report on other legal and regulatory requirements the reasonableness of accounting estimates and related disclosures made by the Board of Directors and the Managing Opinions Director. In addition to our audit of the annual accounts and consolidated • Conclude on the appropriateness of the Board of Directors’ accounts, we have also audited the administration of the Board and the Managing Director’s use of the going concern basis of of Directors and the Managing Director of Skanska AB (publ) for accounting in preparing the annual accounts and consolidated the year 2020 and the proposed appropriations of the company’s accounts. We also draw a conclusion, based on the audit evi- profit or loss. dence obtained, as to whether any material uncertainty exists We recommend to the general meeting of shareholders that related to events or conditions that may cast significant doubt the profit be appropriated in accordance with the proposal in on the company’s and the group’s ability to continue as a going the statutory administration report and that the members of the concern. If we conclude that a material uncertainty exists, we Board of Directors and the Managing Director be discharged are required to draw attention in our auditor’s report to the from liability for the financial year. related disclosures in the annual accounts and consolidated accounts or, if such disclosures are inadequate, to modify our Basis for opinions opinion about the annual accounts and consolidated accounts. We conducted the audit in accordance with generally accepted Our conclusions are based on the audit evidence obtained up to auditing standards in Sweden. Our responsibilities under those the date of our auditor’s report. However, future events or con- standards are further described in the Auditor’s Responsibili- ditions may cause a company and a group to cease to continue ties section. We are independent of the parent company and the as a going concern. group in accordance with professional ethics for accountants in • Evaluate the overall presentation, structure and content of the Sweden and have otherwise fulfilled our ethical responsibilities annual accounts and consolidated accounts, including the in accordance with these requirements. disclosures, and whether the annual accounts and consolidated We believe that the audit evidence we have obtained is suffi- accounts represent the underlying transactions and events in a cient and appropriate to provide a basis for our opinions. manner that achieves fair presentation. • Obtain sufficient and appropriate audit evidence regarding Responsibilities of the Board of Directors and the Managing Director the financial information of the entities or business activities The Board of Directors is responsible for the proposal for appro- within the group to express an opinion on the consolidated priations of the company’s profit or loss. At the proposal of a accounts. We are responsible for the direction, supervision and dividend, this includes an assessment of whether the dividend performance of the group audit. We remain solely responsible is justifiable considering the requirements which the company’s for our opinions. and the group’s type of operations, size and risks place on the size of the parent company’s and the group’s equity, consolidation We must inform the Board of Directors of, among other matters, requirements, liquidity and position in general. the planned scope and timing of the audit. We must also inform The Board of Directors is responsible for the company’s of significant audit findings during our audit, including any sig- organization and the administration of the company’s affairs. nificant deficiencies in internal control that we identified. This includes among other things continuous assessment of the We must also provide the Board of Directors with a statement company’s and the group’s financial situation and ensuring that that we have complied with relevant ethical requirements regard- the company’s organization is designed so that the accounting, ing independence, and to communicate with them all relation- management of assets and the company’s financial affairs ships and other matters that may reasonably be thought to bear otherwise are controlled in a reassuring manner. The Managing on our independence, and where applicable, related safeguards. Director shall manage the ongoing administration according to From the matters communicated with the Board of Directors, the Board of Directors’ guidelines and instructions and among we determine those matters that were of most significance in the other matters take measures that are necessary to fulfill the audit of the annual accounts and consolidated accounts, includ- company’s accounting in accordance with law and handle the ing the most important assessed risks for material misstatement, management of assets in a reassuring manner. and are therefore the key audit matters. We describe these matters in the auditor’s report unless law or regulation precludes Auditor’s responsibility disclosure about the matter. Our objective concerning the audit of the administration, and thereby our opinion about discharge from liability, is to obtain audit evidence to assess with a reasonable degree of assurance whether any member of the Board of Directors or the Managing Director in any material respect: • has undertaken any action or been guilty of any omission which can give rise to liability to the company, or • in any other way has acted in contravention of the Companies Act, the Annual Accounts Act or the Articles of Association.

Skanska Annual and Sustainability Report 2020 197 Auditor’s report

Our objective concerning the audit of the proposed appropri- As a basis for our opinion on the Board of Directors’ proposed ations of the company’s profit or loss, and thereby our opinion appropriations of the company’s profit or loss we examined about this, is to assess with reasonable degree of assurance the Board of Directors’ reasoned statement and a selection of whether the proposal is in accordance with the Companies Act. supporting evidence in order to be able to assess whether the Reasonable assurance is a high level of assurance, but is not a proposal is in accordance with the Companies Act. guarantee that an audit conducted in accordance with generally accepted auditing standards in Sweden will always detect actions The auditor´s opinion regarding the statutory sustainability report or omissions that can give rise to liability to the company, or that The Board of Directors is responsible for the statutory sustain- the proposed appropriations of the company’s profit or loss are ability report on pages 58-86, and that it is prepared in accor- not in accordance with the Companies Act. dance with the Annual Accounts Act. As part of an audit in accordance with generally accepted Our examination has been conducted in accordance with FAR’s auditing standards in Sweden, we exercise professional auditing standard RevR 12 The auditor´s opinion regarding the judgment and maintain professional scepticism throughout statutory sustainability report. This means that our examination the audit. The examination of the administration and the of the statutory sustainability report is different and substantially proposed appropriations of the company’s profit or loss is less in scope than an audit conducted in accordance with Inter- based primarily on the audit of the accounts. Additional audit national Standards on Auditing and generally accepted auditing procedures performed are based on our professional judgment standards in Sweden. We believe that the examination has pro- with starting point in risk and materiality. This means that we vided us with sufficient basis for our opinion. focus the examination on such actions, areas and relationships A statutory sustainability report has been prepared. that are material for the operations and where deviations and violations would have particular importance for the company’s Ernst & Young AB, Box 7850, 103 99 Stockholm, was appointed situation. We examine and test decisions undertaken, support auditor of Skanska AB by the general meeting of the shareholders for decisions, actions taken and other circumstances that are on March 26, 2020 and has been the company’s auditor since relevant to our opinion concerning discharge from liability. the 2016.

Stockholm March 8, 2021

Ernst & Young AB

Hamish Mabon Anders Kriström Authorized Public Accountant Authorized Public Accountant

198 Skanska Annual and Sustainability Report 2020